Overview

Notice of exchange

The Affordable Care Act created a new section of the Fair Labor Stands Act, requiring most employers to provide a Notice to all of their employees about coverage options available through the Exchange/Marketplace. The Exchange/Marketplace is designed to help an Individual obtain health insurance that meets their specific needs. The Exchange’s/Marketplace’s open enrollment begins October 1, 2013 for coverage starting January 1, 2014.

See Also: Spring’s other healthcare reform articles

Do I need to provide Notice of the Exchange/Marketplace to my employees?

The Notice requirement applies to most employers. This link leads to an online compliance assistance tool to help employers determine if the Notice requirement applies to their company.

How do I provide notice to my employees?

At this time the Department of Labor has released three temporary Model Notices for employers’ uses.  The final notices will be released later this year. Until that time employers’ may use the temporary Model Notices, wait until the final Model Notices are released or develop their own Notice.

Please visit this link to obtain the temporary Model Notices provided by the DOL.

If the temporary or final Notices by the Department of Labor are not used the Notice must include the following information:

1)    Notice of the existence of an Exchange/Marketplace, services provided by the Exchanges/Marketplace and contact information.

2)    Inform the employee that they may be eligible for a premium tax credit if the employee purchases a qualified health plan through the Exchange/Marketplace. Advise their employee that they may save money if their employer does not offer coverage or offers coverage that does not meet certain criteria.

3)    Notice that if the employee purchases a qualified health plan the employee may lose any employer contribution to any health benefits plan offered by the employer and that all or a portion of such contribution may be excludable from income for Federal income tax purposes. The payments for coverage through the Exchange/Marketplace are made on an after tax basis.

The Notice may be provided by first class mail or e-mail.

When do I need to provide notice to my employees? 

  • • Full and Part Time Existing Employees: Notice must be provided by October 1, 2013 (Tweet this)
  • • New Employees Hired After October 1, 2013: Notice must be provided within 14 days of the employee’s start date (Tweet this).
  • • COBRA Enrollees: Notice must be provided by October 1, 2013 (Tweet this)

Companies are required to take action to meet the obligations under the Affordable Care Act: Spring Insurance Group recommends that all employers consult their legal counsel with any questions about providing the Notice of coverage options to their employees

The following is a sample Notice:

Section A

Overview

The Affordable Care Act created a new section of the Fair Labor Stands Act, requiring most employers to provide a Notice to all of their employees about coverage options available through the Exchange/Marketplace. The Exchange/Marketplace is designed to help consumers obtain health insurance that meets their specific needs.  This notice provides basic information about the Marketplace/Exchange and health insurance coverage available through your employer.

What is the Marketplace/Exchange?

The Exchange/Marketplace offers private health insurance options from multiple insurance carriers. The Exchange/Marketplace is designed to help a consumer obtain health insurance that meets their specific needs. Open enrollment begins on October 1, 2013 for coverage starting January 1, 2014.

Am I eligible for Tax Credits and Lower Premiums?

Consumers may be eligible for a tax credit that lowers their monthly premium. Actual savings will vary depending on household income. In order to qualify for premium savings either your employer does not offer coverage or the coverage offered does not meet certain criteria. You may be eligible for a credit if the cost of the plan from your employer is more than 9.5% of your household income or the coverage your employer provides does not meet the minimum value standard. The minimum value standard is set by the Affordable Care Act. A plan meets the minimum value standard if plan’s share of the total allowed benefit cost covered by the plan is no less than 60% of such costs.

What are the Drawbacks to Purchasing Insurance through the Exchange/Marketplace?

If you purchase a health plan through the Marketplace/Exchange instead of enrolling in the insurance offered by your employer you may lose the employer contribution from your employer. Your payments made for coverage through the Marketplace/Exchange will also be on an after tax basis.

Section B

The below information contains information about health care coverage offered by your employer. If you decide to enroll in coverage via the Marketplace/Exchange you will need the below information.

1)    Employer Name:

2)    Employer Identification Number (EIN):

3)    Employer Address and Telephone Number:

4)    Who can the Exchange/Marketplace contact about employee health coverage at this job (Name, Phone Number and E-mail Address)?

5)    This Employer offers health insurance to the following employees:

6)    Eligible Employees are Defined as:

7)    This Employer does or do not offer health insurance to eligible dependents.

8)    Eligible dependents are defined as:

9)    Is this employee eligible for coverage offered by this employerYes or No

10) If No, will they be eligible within the next 3 months? Yes or No

11) Does this employer offer a health plan that meets the minimum value standard? Yes or No

12) What is the employee’s cost of the plan?

 

The above information is for informational purposes only and is not intended as legal advice.

 

Image credit: Pat Guiney via flickr

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Teri Weber

Teri Weber

Partner at Spring Consulting Group, LLC
Teri Weber, ACI is a Partner with Spring Consulting Group. She has over 10 years of experience in health and welfare plan strategy, design, pricing, and implementation. She also works with absence management programs, including disability, family medical leave and leave of absence tracking. Her areas of expertise have allowed her to work with diverse employers and vendors to streamline processes and programs to meet the needs of insurers, administrators, employers and employees. Teri is on the Board for the New England Employee Benefits Council (NEEBC) and recently served as lead editor for the Disability Management Employer Coalition’s (DMEC) Return to Work Program Manual. Prior to joining Spring, Teri worked with Watson Wyatt, Buck Consultants and AON Consulting. In addition she was an Account Manager with Health Direct, Inc. Teri earned a BS at the University of Connecticut and a MBA at the University of Massachusetts. She holds an ACI designation and is a licensed broker in the states of MA and CT.